CAUSEY: Time to reconsider long-term-care plan

Looking for the perfect gift for your spouse, kids, siblings and parents? Get yourself a good long-term-care insurance policy. And pray — for yourself and your loved ones — that you never need it.

Most of us buy life insurance because we reluctantly concede that someday it will pay off.

Most of us buy health insurance hoping we won’t need it but knowing that eventually we will use it.

But most of us buy travel insurance, fire insurance, auto insurance, long-term disability and long-term care (LTC) insurance hoping it will never pay off.

Airplane crashes typically have a bad outcome. Losing a house and your belongings to a fire is not what something you hope for. And being unable to work — and draw a paycheck — or being unable to bathe, feed or dress yourself is not something anybody looks forward to.

Although the federal government is a model employer in many ways, its health insurance program doesn’t cover what LTC insurance does. Nor does Medicare. You must be nearly broke before you can go on Medicaid, and it does not pay for the kind of assisted-living coverage most people would want for themselves or a loved one.

LTC is on a lot of people’s minds these days, because the program offered to active and retired civil servants (and in some cases, their parents) is about to change. Premiums did not go up during the just-expired seven-year contract. But they are going up in January for many people. The increases will range from 5 percent to 25 percent, depending on age and the options people choose.

The new benefits will be outlined shortly by the Office of Personnel Management. So will premiums.

Arthur Stein, a certified financial planner who specializes in investments and insurance, says most people need LTC coverage. He recommends that they get a policy from a top-rated firm and that the policy have an automatic 5 percent inflation add-on each year.

Mr. Stein says that many federal and postal workers can get a better deal — that is, equal benefits with lower premiums — by going outside the government program. This is especially true if they are younger and healthy enough to pass what are often more stringent underwriting requirements in a non-group private plan.

While full details of the new federal LTC offering (backed by insurer John Hancock) are yet to come, Mr. Stein summarized your options this way:

• Remain in your current benefit structure subject to rate increases that may apply.

• Keep your premiums at about the same as what you pay now by making changes to your current benefits.

• Or take advantage of a one-time opportunity to switch to the new benefit options without underwriting.

That last point is important, especially if you are not in good health or are older and likely to need LTC sooner rather than later.